He said the importers have been purchasing distressed cargoes of low quality product and selling the same to LPG marketing companies while taking advantage of the dearth of LPG supply in the international market due to historically low prices. LPG is a mixture of propane and butane and is typically imported in the ratio of 60 percent Butane and 40 percent Propane. Recently however cargoes of pure butane have been imported, which have been declared as LPG, thereby evading custom and import duties.
"LPG companies have been duped into believing they were purchasing quality product, whereas they have been receiving butane, which is a low pressure product" he said. Another worrisome trend that has emerged is the connivance of some LPG importers with SSGC LPG in reserving exclusive space at the latter's terminal making it difficult for other importers to offload their product. This has resulted in substantial demurrage payments by importers and has caused delays in distribution of the product. "Being a public sector company, SSGC LPG cannot allow exclusivity to any one company and neither should it refuse to accommodate the product of others. If anything it should allow the swap of product between importers in order to maximize revenue for itself" he added.